The Federal Government expects new legislation passed in the Senate yesterday will "put every big business on notice" and help millions of small businesses be paid on time.
Under the Payment Times Reporting Scheme, large businesses and applicable government enterprises with a total annual income of more than $100 million will have to report publicly on how and when they pay their small business suppliers.
Minister for Employment, Skills, Small and Family Business Michaelia Cash said the scheme would provide unprecedented transparency.
Recently, businesses such as Rio Tinto and Telstra rapidly abandoned payment practices which negatively impacted on small businesses once they were subjected to public exposure, leading to a shortening of payment periods to 20 days.
"Late payments have a significant impact on small business cash flow and inhibit the ability of a firm to invest, grow and employ," Minister Cash said.
"Shining a light on large business payment performance will lead to fairer and faster payments for Australia's 3.5 million small and family businesses.
"Bad payers won't be able to hide, as this Scheme will expose their poor practices."
Minister Cash said the Government had developed this legislation following extensive consultations with industry associations and representatives of small and large business since early 2019. Their feedback has directly informed the design and operation of the scheme.
The scheme will begin on 1 January, 2021.Never miss a news update, subscribe here. Follow us on Facebook, LinkedIn, Instagram and Twitter.
Business News Australia